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Beware of online loan sharks

Loan sharks are increasingly using social media platforms to advertise their illegal loans and target potential victims.

According to the England Illegal Money Lending Team (IMLT), more and more people are falling prey to unscrupulous lenders online, as statistics show that one in five victims met their lender on social media in the first half of 2020.

These criminals will lure people in with seemingly attractive loan offers but will quickly resort to intimidation, threats and violence to enforce repayment and trap borrowers in a spiral of debt.

A recent campaign by IMLT, called #SharkFreeSurfing, ran across the Stop Loan Sharks social media platforms, with the aim of encouraging not just victims, but the wider community to report online illegal money lending activity.

Tony Quigley, Head of the England Illegal Money Lending Team, said: “We are aware that loan sharks are becoming more active on social media, particularly in community groups and on local selling pages, which we will not tolerate.

“I urge people to remain vigilant when online – if you spot a suspicious loan advert on social media, report it to us. If you need to borrow money, always check the lender is authorised by the Financial Conduct Authority and contact your local credit union about ethical financial products and services.”

According to IMLT, loan sharks are using online platforms to advertise their predatory lending activities and target potential victims. Many people throughout our communities are struggling financially due to the pandemic, with increased pressure to pay monthly bills, so they are more at risk of being targeted by illegal money lenders.

How to protect yourself from loan sharks online:

  • Know who you are dealing with. If you’ve only ever met someone online or are unsure of the legitimacy of a lender, take some time to do a bit more research. Check the lender is authorised by the Financial Conduct Authority (FCA). If not, don’t borrow from them and report them here.
  • Beware of loan adverts with no credit checks. Loan sharks have been known to advertise in community groups and on local selling pages. They may seem friendly and accommodating, but their behaviour can quickly change, and you might be harassed or threatened if you get behind with your repayments. Lenders must carry out credit checks to make sure borrowers can afford to pay back their loans. You should never hand over your bank details to strangers, even if they lure you with attractive offers. Remember, if it looks too good to be true, it probably is.
  • Beware of any requests for your details or money. Loan sharks may ask for copies of your passport or pictures of your house, the street and your house number. Never send money or give card details, online account details or copies of personal documents to anyone you don’t know or trust.

Kerry Hallett, Credit Union Director, said: “If you’re tempted to use a loan shark because you’re struggling to borrow money elsewhere, think twice. If you haven’t contacted the Credit Union, then why not give us a call? Credit unions like ours provide safe savings and affordable loans, and unlike other lenders, we will not judge you if you have had financial problems. There are also organisations that offer free debt advice, such as Citizens AdviceStepChange and the Money Advice Service.”

If you suspect someone may be a loan shark or they are acting inappropriately, you can report them anonymously here or by calling the Stop Loan Sharks Helpline on 0300 555 2222. Alternatively, you can email reportaloanshark@stoploansharks.gov.uk or via live chat on the Stop Loan Sharks website.

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